Titus Mede II was not a pacifist man that you're picturing him out to be. When
Titus Mede II ascended the throne in
4E 168,
he inherited a weakened empire. Emperor Titus Mede had only a few short years to consolidate his rule before his leadership was put to the ultimate test.
The War Begins
On the 30th of Frostfall, 4E 171, the Aldmeri Dominion sent an ambassador to the Imperial City with a gift in a covered cart and an ultimatum for the new Emperor.
The long list of demands included staggering tributes, disbandment of the Blades, outlawing the worship of Talos, and ceding large sections of Hammerfell to the Dominion. Despite the warnings of his generals of the Empire's military weakness, Emperor Titus Mede II rejected the ultimatum. The Thalmor ambassador upended the cart, spilling over a hundred heads on the floor: every Blades agent in Summerset and Valenwood.
And so began the Great War which would consume the Empire and the Aldmeri Dominion for the next five years according to
http://www.uesp.net/wiki/Lore:The_Great_War_(book)
This man that you cherish so much by essentially saying that hes full of honor and backs up his people 100% is a just an emotional opinion of yours, and not actual fact. You protest the idea that Ulfric Stormcloak only cares about his name in songs, but who wanted to show Tamriel on that tragic that day the length of his penis? It was Titus Mede II with his poor decisions that caused the Great war. Even his General warned him about his military weakness, and he carelessly rejected the ultimatum anyways thus further angering the Almderi Dominion. He finally came to his senses after seeing his men clinging to death.
Now let's take this into a perception

Had Titus Mede II signed the ultimatum the first round I would be right beside him. I would be an Imperial supporter, not Stormcloak. I would've acknowledge what a great man Titus Mede II was by understanding the strengths and weaknesses of his Empire by listening to the very same people that he employed to ensure the safety of his country and his Empire. I too would be saying that Ulfric is a douche bag for creating this army when Titus Mede II had no other choice but to sign it thus preventing the Great war to happen. I cannot do this because Titus Mede II is in fact a war lord, not a peaceful Emperor that you picture him out to be.
Yes Titus Mede II had some gold shining moments when he captured the Thalmor general, but all of this could've very well had been preventive had Titus mede II heed the warnings from his Generals.
That is just laughable. Your entire argument against the Empire since day one has been because they surrendered. You would stand by the Empire had it not fought? LOL. I'm sorry, but that is highly unlikely, because it is mentioned why the terms weren't accepted first round, in that very book you're quoting.
However, there is a great difference between agreeing to such terms under the mere threat of war, and agreeing to them at the end of a long and destructive war.
No part of the Empire would have accepted these terms in 4E 171, dictated by the Thalmor at swords-point. Titus II would have faced civil war. By 4E 175, most of the Empire welcomed peace at almost any price.
You're making a biased assumption as to why he chose peace, it is mentioned why he went for peace. To give the Empire time to regain strength and fight again.
Emperor Mede is not the one fighting in Skyrim, Gereal Tallius is and he gives up, says nothing and dies like a dog at the end. Rikke does the fighting the good general just sits there. Ulfric at least stands up and fights to the death. As for killing the Nord guardsmen during the battle for Solitiute what did you expect him to do just let them kill his own troops and himself? Yeah that's a wonderful battle plan just ignore the men trying to kill us and only focus on the Legion just because they are from the same place as we are.
Tullius actually does fight, the second Rikke is attacked, he jumps up to her defense, he even takes his death rather well. His last words are "So be it" Tullius isn't a coward, but he isn't a Nord, Ulfric has to fight to the death or he won't be allowed into Sovngarde. And Ulfric doesn't fight to the death completely, he is on his knee until either you or Tullius kills him, just the same as Tullius. Both Ulfric and General Tullius are sitting down when you enter their Castle/Palace.
When I fought Uflric he and Gulmar got up to kill me. Tullius sits there and gets his head cut off, while Rikke dies with Honor. What would make for a better song in the mead hall? An Imperial General killing Ulfric or The Dragonborn skriking his head from shoulders? The Dragonborn is much better for a story you have to admit at least that. He's fighting to FREE Skyrim and has accepted that Nord blood HAS to be spilled to do this, Nords fight in the Legion Nords oppose his Vision of a free Skyrim. If they fight him then they die. The same is true for the Legion if you fight them you die. As for the If you're not with me then you're against me, if he was the way you make him out to be he would have killed or exiled all the dark elves in Windhelm.
Ulfric is far from perfect and anyone saying that he is is an idiot. But to dismiss everything he says or does as BS and to assume he lies and does everything for personal gain is just as wrong.
As again, Tullius does fight until you defeat him. He doesn't just sit there while Rikke is attacked.
Skyrim didn't need bloodshed to be free, it could have left peacefully. High King Torygg was very keen on the idea and he greatly respected Ulfric Stormcloak. A peaceful leaving the Empire, maintaining good relations, why wouldn't the Empire go for it, it still leaves trade open, which is what Skyrim needs the Empire for. They need the food and resources the Empire provides their people.
The Magic is the Dragonborn.

the empire can't win without the Dragonborn either remember.
Torygg had the chance to back out, He didn't. Ulfric killed him to prove a point, that he was weak. Granted he was a young man not a seasoned warrior. Sybille Stentor, says that he would have considered it not actually done it. Do I think Ulfric could have done things differently yes. Torygg did have a high opinion of Ulfric.
Ulfric has nothing to do with how much the Argonians are paid he doesn't EMPLOY them Torbjorn Shatter-Shield does. And you can convince him to raise their pay. So trying to blame Ulfric for someone else's actions is sad at best. Let it be know that Scouts-Many-Marshes does say that Ulfric did ban them from the city. But we have no reason as to this.
The Dunmer in Windhelm are another story. They live in a slum of their own making. The Winter Quarter that later became know as the Grey Quarter was actually a nice place to live before they came along. They refused to integrate into the Nord culture in Windhelm, the city that Ysgamor built. The effective beating heart of Skyrim's culture. Yeah the locals would be pissed about it. Instead of building a a Tavern, Inn or Mead Hall they built a Corner Club. Instead of trying to adapt to the local Nords in Skyrim, they acted like they were still in Morrowind and expected the Nords to adapt to them. They hate the Nords as much the the Nords hate them. Niranye is treated just fine and she is an Altmer which is worse because she could be a Thalmor in disguse. She even says that's it's the Dunmer's fault they are living the way that they are. The Dunmer are treated better in every other place in Skyrim because they act differently.
He told the Aldmeri Dominion the information under duress. He was being tortured, kind of hard to you know...not give that information away. I see no false pretenses that he challenged Torygg under. Solitude loved Torygg, he just killed him in open combat I doubt the local populace would like that very much. Even if they though it was justified they still would have called for his head, If Elisif didn't do it first. They saw a seasoned warrior kill a young man to them it was murder.
Whiterun is under siege sieges are messy affairs. Windhelm then the Imperials siege it they siege it by sending "balls of Fire hurtling into a town filled with innocents", innocents die in war all the time it's not nice or fair but hey war
isn't fair. Where is your concern for the "oppressed" Dunmer of Windhlem then? Or is it justified because Ulfric is in the city? The Empire broke their oath to Ulfric first by saying that he and his men could worship Talos then going back on their word. Then imprisoning him for it.
The Legion is doing rather well in Skyrim without the Dragonborn, most of the dead are Stormcloaks who get ambushed by the Legion, there are Stormcloak prisoners everywhere.
Torygg would need the support of Jarls, the Holds in Skyrim are largely independent. He would of needed Ulfric to ask him, which Ulfric never did. They thought he was, when he came to Solitude requesting an Audience with the High King, they all assumed he would have asked Torygg to declare independence. Torygg wasn't weak, he had some martial training but that mattered little since Ulfric used the voice straight off the bat. Which everything conflicts with Ulfric's defense that he killed him with his sword. Torygg implies the shout sent him to Sovngarde and that Ulfric is dishonorable. The loading screen in Skyrim also mentions;
The High King of Skyrim, Torygg, was recently killed by Ulfric Stormcloak, who used the ancient power of the Thu'um to nearly shout Torygg to pieces.
The Dunmer issue is recent, ever since Ulfric took the throne of Eastmarch. Jarls before Ulfric, including his father were kind to them. Most of their problems stem from Ulfric Stormcloak's inaction. He ignores their requests, it's not that there is a Racial segregation policy, but basic things. They're called lesser beings because they're not Nords. Hated because they won't fight for the Stormcloaks, whom have mistreated them.
Ulfric cooperated with the Thalmor after the war, when they let him go. After the war, contact was established and he has proven his worth as an asset.The so-called
Markarth Incident was particularly valuable from the point of
view of our strategic goals in
Skyrim, although it resulted in Ulfric becoming generally uncooperative to direct contact.
The Empire never promised Ulfric anything. They were dealing with the aftermath of the Great War.
So why did the rebellion drag on for as long as it did? Ulfric served in the Legion he knows their tactics. Ulfric was ambushed with a small guard and order his men to stand down rather than be slaughtered around him.
Torygg might have given up his seat as High king if he lost but would the Empire have let Torygg break from the Empire? I rather doubt it. Ulfric killed him to prove that he was too weak to rule Skyrim nothing more. Torygg had the chance to break from the Empire when a man he greatly repected was in prison for wanting to Worship Talos something he did in secret. The empire would has done the same to Ulfric. They sent him to be executed rather than a trail. So much for the vaunted "laws and justice" of the Empire. Ulfric doesn't execute any Jarls for simply not following him into his rebellion, he just takes their cities.
The rebellion is dragging on because the Thalmor are keeping Ulfric Stormcloak alive, and they are also aiding the Stormcloaks. The Legion was trying to capture Ulfric many times but "He avoided them like he knew exactly where they were" Or something along those lines, which indicates the Thalmor doing. They were also at Helgan trying to stop the execution, but Raijin will deny it, even when the Thalmor themselves admit to it.
The Empire would of let Skyrim go peacefully, there is no reason to think it wouldn't. Skyrim and the Empire would still be on good terms, there would still be that trade and it would allow the Legions from High Rock to pass safely through Skyrim. Ulfric killing the High King and declaring war on the Western Holds, isn't exactly what the Empire wants. The Legion stepped in to restore order.
Whiterun is neutral until Ulfric sends the ax Balgruuf even says so, or did you miss that part? I guess so...
Sure why not since most of them are tied up defending the southern border from the Dominion.
Balgruuf sends Ulfric his axe in the other version. What Balgruuf meant when he sent his axe was, he would face Ulfric in the old ways, one on one combat if he refused the gesture. Ulfric sent his armies. Balgruuf was willing to challange him.
The Imperial supply lines aren't to the South, but to the North. They're coming from Solitude by boat.